Question

Apple Inc. is a technology company that designs, produces, and sells a variety of digital devices, including the iPod, iPhone, and iPad. The following data (in millions) were adapted from a recent financial statement of Apple.


1. Compute the ratio of liabilities to total assets for Years 1 and 2. Round to one decimal
place.
2. Given your answer to part (1), what is the ratio of stockholders’ equity to total assets? Round to one decimal place.
3. Compute the ratio of liabilities to stockholders’ equity. Round to one decimal place.
4. Are Apple’s operations financed primarily with liabilities or equity?
5. Comparing Years 1 and 2, should creditors feel more or less safe in Year 2?
6. With a market price of $444.38, compute the price-earnings ratio for Year 2.
7. With a market price of $459.68, compute the price-earnings ratio for Year 1.
8. Compare the results from parts (6) and (7). Comment on anydifferences.


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  • CreatedMarch 11, 2014
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